India Signs Major Trade Deals with US and EU

India fundamentally restructured its trade architecture in early 2026 by finalizing major agreements with the European Union and the United States. On January 27, the Government of India concluded a comprehensive Free Trade Agreement with the European Union, which eliminates tariffs on over 90% of goods traded. The pact provides duty-free access for 99% of Indian exports, specifically benefitting textiles, gems, and jewelry, while India reduced tariffs on European cars from 110% to 10%.

Following a period of strained relations caused by 50% tariffs imposed by the U.S. in 2025, India and the United States finalized an interim Bilateral Trade Agreement in February. The U.S. reduced reciprocal tariffs on Indian goods to 18%, while India reduced tariffs on American industrial and agricultural products to zero in many cases. As part of the deal, India committed to purchasing $500 billion in U.S. energy, technology, and aircraft over five years and agreed to wind down Russian oil imports. However, Commerce Minister Piyush Goyal later clarified that this figure represents projected imports to support growth goals rather than a formal investment commitment.

Further expanding its reach, India signed Terms of Reference on February 5 to formally launch FTA negotiations with the six-nation Gulf Cooperation Council. The government also advanced trade talks with Chile, Canada, and the United Kingdom to reach a $2 trillion export target by 2030. While these deals open markets valued at $400 billion for Indian agriculture, the government maintained safeguards for domestic dairy, poultry, and genetically modified crops to protect local farmers.